SUPREME COURT OF QUEENSLAND CITATION: PARTIES: Wells v Australian Aviation Underwriting Pool [2004] QCA 43 ROBYN LUCELLE WELLS (plaintiff/appellant) v AUSTRALIAN AVIATION UNDERWRITING POOL (now known as QBE AVIATION) (defendant/respondent) FILE NO/S: Appeal No 7270 of 2003 SC No 8085 of 1999 DIVISION: PROCEEDING: ORIGINATING COURT: Court of Appeal General Civil Appeal Supreme Court at Brisbane DELIVERED ON: 27 February 2004 DELIVERED AT: Brisbane HEARING DATE: 20 February 2004 JUDGES: ORDER: de Jersey CJ, Williams JA and Mackenzie J Separate reasons for judgment of each member of the Court, each concurring as to the order made. Appeal dismissed with costs to be assessed CATCHWORDS: INSURANCE ACCIDENT AND SICKNESS INSURANCE THE CONTRACT CONDITIONS where appellant entered into policy insuring against injury to her husband where appellant s husband was injured in a motor vehicle accident whether the trial Judge erred in their construction of the definitions of permanent total disablement and reasonably qualified by training, education or experience whether the trial Judge erred in his findings as to the capacity of the appellant s husband to work and the income earned after the accident occurred whether the trial Judge erred in finding that the business remained registered whether the trial Judge allowed the respondent s Counsel to cross-examine witnesses using fictitious information Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404, distinguished Devries v Australian National Railway Commission (1992) 177 CLR 472, referred to Fox v Percy [2003] HCA 22; (2003) 197 ALR 201,
2 COUNSEL: SOLICITORS: distinguished The appellant appeared on her own behalf with B C Wells assisting S W Couper QC for the respondent The appellant appeared on her own behalf with B C Wells assisting Hunt & Hunt Lawyers for the respondent [1] de JERSEY CJ: The appellant unsuccessfully sued the respondent insurance company for the sum of $437,600, claimed to be due under a policy of accident insurance. She had entered into a 12 month policy commencing on 1 October 1995, insuring against injury to her husband, Brian Colin Wells. Should such injury produce permanent total disablement, then the sum of $500,000 was to be payable to the appellant. Mr Wells was injured in a motor vehicle accident on 17 August 1996, during the currency of the policy. The respondent accepted that he consequently suffered temporary disablement, which entitled the appellant to payments totalling $62,400, which were made. The amount claimed was the difference between those two sums. It was accepted that the lesser sum had to be brought to account were a finding of permanent total disablement warranted and the sum of $500,000 otherwise due. [2] We received comprehensive written submissions for the appellant. At her request, her case was, by leave, presented orally at the hearing by her husband. (The respondent raised no objection to that course). [3] Mr Wells was 59 years old when he suffered his injury. He was a qualified pilot and licensed aircraft maintenance engineer. He and the appellant were the proprietors of the firm, Downs Aeromarine Services, based in Toowoomba. Nearly all its business involved one customer, Stahmann Farms Inc. The work carried out covered both flying and aircraft maintenance. [4] The policy defined permanent total disablement as: disablement lasting twelve calendar months which at the expiry of that period is beyond hope of improvement and which would prevent the Insured Person engaging in each and every occupation or employment for wage or profit for which he or she is reasonably qualified by training, education or experience. [5] One of the grounds of appeal is that the learned trial Judge erred in his construction of that definition. [6] His Honour expressed two conclusions which the appellant particularly challenges: 1. that the phrase beyond hope of improvement did not mean that improvement must be unlikely, but rather, that the condition be beyond any hope of improvement, with the qualification that the hope must be one for which there was a rational basis in other words, as at the end of the 12 month period, beyond any reasonable hope of improvement; and 2. that to qualify, the insured person must be prevented by his or her disability from engaging in any relevant occupation or employment (for which the
3 insured is qualified by training, education or experience), not just the insured s usual occupation or employment. [7] In relation to a number of submissions, the appellant referred to representations allegedly made by employees or agents of the insurer. Such extrinsic material could not in law in this case be used in the construction of the policy. In any case, the primary Judge was not asked to proceed that way: no evidence of any such representations was given, and no case of estoppel or misrepresentation was pleaded. [8] His Honour expressed certain findings of fact relevant to those issues of construction. As to the first, after an apparently careful review of the medical and other evidence, he said: there is no evidence of any medical opinion based upon reliable experience or research which is to the effect that a person still suffering post-concussional syndrome after twelve months could have no rational hope of improvement. I am not satisfied that Mr Wells post-concussional syndrome was beyond hope of improvement as at August 1997. [9] The issue whether the condition is beyond any reasonable hope of improvement is to be addressed as at the end of the 12 month period. In his oral submissions, Mr Wells pointed to the circumstance that still, after some years, he suffers from the syndrome. Accepting, for argument, that factual position, it would not necessarily be inconsistent with there having been some reasonable hope of improvement at the relevant time, namely, at the end of the 12 month period (17 August 1997). [10] As to the second issue, His Honour made two findings: first, that during the period of 12 months following the accident, Mr Wells was able to perform the work of a licensed aircraft maintenance engineer, the Judge observing that he was unable to be satisfied that Mr Wells was precluded from performing other types of work sometimes performed by licensed aircraft maintenance engineers ; and second, accepting the evidence of a psychologist, Mr Dent, that Mr Wells was capable of working in other pursuits, such as car park attendant, on a full-time or near full-time basis; the appellant had not established that her husband was not reasonably qualified to engage in that occupation. [11] The Judge s interpretation of the phrase beyond hope of improvement was in my view correct. The provision is directed at a situation of total disablement which is permanent. Reading it in a way which would leave open the prospect of improvement, albeit that improvement would be unlikely, would not sit comfortably with that notion of permanence, whereas excluding any reasonable hope of improvement would. I consider that to be the natural construction of that aspect of the definition. [12] I am, with respect, less convinced of the correctness of His Honour s approach to the second issue. The provision contemplates disablement preventing the person from engaging in an occupation or employment for which he or she is reasonably qualified by training, education or experience. Certainly His Honour s conclusions, recorded in paragraph [6] above, acknowledged that qualification. My query is whether the position of car park attendant should be considered as one for
4 which Mr Wells, a qualified aircraft maintenance engineer, would be qualified by training, education or experience. It may be that the definition, in this aviation insurance policy, a policy which records Mr Wells usual occupation as a crft & marine engin r & cons, would in this situation be seen to be directed towards the occupation of aircraft maintenance engineer or comparable or related occupations of that ilk, in other words with some focus on the insured s actual qualification. Notwithstanding the different terms of the policy s definition of temporary total disablement, which refer to an insured s being prevented from engaging in his or her usual occupation or employment, a difference in terminology on which Counsel for the respondent particularly relied, I am not at this stage convinced that capacity to work as, for example, a car park attendant, should of itself have excluded a finding of permanent total disablement in the case of this aircraft maintenance engineer. But it is not necessary to express a concluded view on that issue, because of the Judge s finding that Mr Wells was able to perform the work of a licensed aircraft maintenance engineer, provided that finding was open, and as will emerge, in my view it was. It also would in any event be undesirable to express a concluded view on the question of construction, in circumstances where we have not had the benefit of submissions from legal representatives for both parties. [13] That question of fact is the subject of the first ground of appeal, which asserts that the Judge erred in finding that Mr. Wells was capable of performing Supervisory duties as a Licensed Aircraft Maintenance Engineer. [14] The learned Judge found that during the 12 months following the accident, Mr Wells was able to perform the work of a licensed aircraft maintenance engineer, at least insofar as that involved supervision and certification, trend monitoring, and propeller balancing. Those findings were based on work to which Mr Wells admitted in his evidence (supervisory work (p 57), trend monitoring (pp 62-3, 139-40) for example); observations made of him at the workplace by a witness Mr Mittendorff (pp 191-8: at work daily; seeing him working with tools on aircraft (I appreciate Mr Wells contends he was simply testing his capacity to do maintenance work); seeing him engaged in propeller balancing and trend monitoring); invoices sent by the firm to Stahmann Farms Inc and other clients; and tax returns of the firm covering the few years after the accident. On the basis of Mr Mittendorff s evidence, the Judge accepted that some aircraft maintenance engineers perform only supervisory work. The Judge apparently carefully analysed the relevant evidence in paras [25-36] of his reasons for judgment. He rejected attempts by Mr Wells to minimize the significance of some of the work he accomplished, and Mr Wells attempts to explain away the significance of the invoices and returns. [15] It may be seen, therefore, that the Judge s factual conclusions were at least in significant part based on an assessment of the credibility of Mr Wells. These factual findings are not in these circumstances vulnerable on appeal. Before us, Mr Wells, unsurprisingly, challenged and rejected the unfavourable view taken by the learned Judge on his credibility. The appellant not now being represented by lawyers, I should include reference to Devries v Australian National Railway Commission (1992) 177 CLR 472, 479: a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against even strongly against that finding of fact If the trial judge s finding depends to any
5 substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge has failed to use or has palpably misused his [or her] advantage (Owners of the Steam Ship Hontestroom v Owners of the Steam Ship Sagaporack [1927] AC 37, 47; [1927] All ER Rep 831; (1927) 136 LT 33) or has acted on evidence which was inconsistent with facts incontrovertibly established by the evidence or which was glaringly improbable. None of those exceptional situations applies here. [16] While the Judge s findings suggest Mr Wells was found capable of performing only part of the usual spectrum of work of an aircraft maintenance engineer, the significance of his findings derives in one way from his accepting that some such engineers perform only supervisory work: accordingly, he should be regarded as able to engage in that occupation. But in fact his capacity was not limited to supervision, and also, on the Judge s findings, embraced, for example, propeller balancing and trend monitoring at least. Mr Wells asserted before us little supervisory work, in particular, was available in the Toowoomba area. But the definition in the policy is not directed geographically. [17] The second ground of appeal is that His Honour erred, having found in error that Mr. Wells was capable of performing supervisory duties when there was no evidence that such work was available in Toowoomba or elsewhere. Accepting the evidence of Mr Mittendorff, who was a witness called by the appellant, the learned Judge found that some licensed aircraft maintenance engineers perform only supervisory work, and that the impediment to Mr Wells[ ] finding fulltime work of that kind came from the limited size of the relevant employment market in Toowoomba, rather than from what the occupation involves. As indicated above, the definition of permanent total disablement relevantly fastens on the capacity of the insured person to engage in the occupation or employment, not the place where such work would or could be carried out. [18] The third ground of appeal is that His Honour erred in finding that Mr. Well s income in the 1996-1997 year was earned after the accident occurred. The learned Judge made these findings: The tax returns of the Wells firm for the 1997 and 1998 years are indicative of the extent to which Mr Wells was able to perform remunerative work. In the 1997 year, the firm derived gross income from fees and part sales of $22,113.02, with operating expenses of $7,611.77. In the year to 30 June 1998, gross income for fees and part sales amounted to $29,188.12, against which there were purchases of $1,818.27 and operating expenses of $6,217.00. Mrs Wells did not perform any of the work from which this income was derived. Nor is any expense shown for wages or subcontractors. The extent of the income revealed by those profit and loss statements corresponds with the invoices. It fairly reveals that in the year commencing 1 July 1997, through Mr Wells work, the firm was able to generate an operating profit in excess of $20,000. This is a modest income but this is likely to be due to the small market in which the firm provided its maintenance services. Mr Mittendorff s evidence shows the existence of a number of other maintenance
6 organisations in Toowoomba. Importantly, the amount of work which Mr Wells was able to do was considered sufficient to warrant the business being kept open and, upon Mr Mittendorff s recollection, to warrant Mr Wells presence at his workplace on a daily basis. It is also significant that [Mr Wells] chose to renew his accreditation as an aircraft maintenance engineer in early 1997. [19] The Judge went on to reject Mr Wells explanation of some of these matters: that the amounts charged to Stahmann Farms Inc were amounts annually due under an agreement, rather than in consideration of any particular supervisory work ; and that some of the fees charged to Stahmann Farms Inc did not relate to particular services of value, but to Mr Wells travelling expenses between his residence and Toowoomba airport. More broadly, as His Honour said: In his evidence, Mr Wells sought to create the impression that he performed very little work deserving of remuneration. He claimed that invoices were rendered by his firm, and paid by the customer, in circumstances where really no effective work was performed, and the customer knew it. I do not accept this evidence. [20] The appellant submits that work carried out in July to August 17 1996 has no bearing on this case, including payments received after August 17, but which relate to work completed prior to that date. This is the point particularly taken under the third ground of appeal. As the matter was left before the Judge, he was entitled to assume at least an appreciable part of the year s income related to work done after 17 August. The appellant s own analysis of the invoices shows $9,565 referable to the period post 17 August, which would be sufficient to sustain His Honour s reliance on that feature, bearing in mind that it was only one of a number of matters upon which he relied for his factual finding. It must be noted that His Honour has approached the matter on a broader basis, involving the rejection of claims made by Mr Wells as not worthy of credit. I consider His Honour s approach was open, and this third ground not sustained. [21] The fourth ground of appeal is that His Honour erred in finding that Mr. Wells s firm earned income in the year starting 1st July 1997 for Mr. Wells s work. That finding was justified, by way of inference from the presence of Mr Wells at the workplace, the finding that neither Mrs Wells, nor subcontractors, nor paid employees did the work, and the invoices and tax returns. It was also supported by the observations of Mr Mittendorff. [22] The fifth ground of appeal is that the learned Judge erred in finding that Mr. Wells s business remained registered after 1st July 1997 because the amount of work Mr. Wells was able to do was sufficient to warrant the business being kept open. Having expressed that finding, His Honour added reference to Mr Wells having been present at the workplace on a daily basis, as observed by Mr Mittendorff. The overall finding was open on the evidence. [23] The sixth ground of appeal is that His Honour should have found that Mr. Wells was Permanently Totally Disabled within the meaning of the Policy.
7 [24] The learned Judge apparently carefully recounted and analysed the evidence of the various medical witnesses: Drs McIntyre, Morley, Duke, Klug, Cameron, Gillespie and Dahl, and the psychologist Mr Dent. A particular complaint founding this ground is the contention that Counsel for the respondent was allowed to convince various Doctors to change their opinions on Mr. Wells s medical condition by [presenting] scenarios that had no bearing in fact; and even conditions that were entirely fictitious. An examination of the transcript provides no support for that contention, and it is important to notice that no such complaint was made during the trial by way of submission by Counsel who appeared for the appellant at the trial. His Honour s approach to this issue, on the factual basis, is unexceptionable, and the ground of appeal was not sustained. [25] Finally, ground eight, added by way of amendment of the originally cast notice of appeal, contends, in similar vein, that His Honour erred in allowing the [respondent s] Counsel to cross examine witnesses using fictitious information, and/or information that had not been disclosed, and tactics designed to confuse. In her amended outline of argument, the appellant contends that The whole exercise appeared to be designed by the Defence to assist in depriving Mr. Wells of any credibility. Absent any unfair or misleading approach, such a complaint is plainly not sustainable. The respondent was of course entitled to challenge the credibility of Mr Wells, and apparently did not in its approach trespass beyond legitimate bounds. [26] By the written material, the appellant sought a review by way of appeal which would effectively involve the re-litigation of the claim. The appellant s approach misconceives the role of the appellate court which, while conducting a rehearing, does so on the evidence led at the trial and recognizing the trial Judge s advantage in having seen and heard the witnesses, a particular advantage where, as here, questions of credibility arise (cf Fox v Percy [2003] HCA 22; Devries). I sought to explain this to Mr Wells at the oral hearing. [27] It remains to mention that the appellant sought, at the hearing of the appeal, to lead a substantial body of additional evidence. The proposed additional evidence was not fresh in the sense that it could not, with reasonable diligence, have been assembled for use at the trial. Questions of cogency and influence on outcome aside, the additional evidence should not, for that reason alone be received. Cf Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404, 408. [28] Mr Wells kindly referred us to Gatton Bus Service Pty Ltd v Australian Aviation Underwriting Pool Pty Ltd [1992] QCA 86, during his oral submissions, but that decision of the Court of Appeal, while interesting because it concerned a policy of this character, did not determine anything of relevance to this appeal. [29] In my view, none of the grounds of appeal was sustained. I would order that the appeal be dismissed, with costs to be assessed. [30] WILLIAMS JA: I agree with the reasons for judgment of the Chief Justice and with the order he proposes. [31] MACKENZIE J: I agree with the orders proposed by the Chief Justice for the reasons given by him.